Many economists have already lowered their projections for the current financial year, with some even warning about the possibility of a recession due to the COVID-19 disease-induced lockdown.
New Delhi, May 29:
India’s gross domestic product (GDP) grew 3.1 per cent in January-March, official data showed on Friday. That was much better than economists’ estimates, but still lower than an expansion of 4.1 per cent estimated in the previous quarter. With that, the annual expansion in the GDP stood at 4.2 per cent in fiscal year 2019-20, marking the lowest pace of growth in 11 years. The official rate of GDP expansion comes days after the country entered a third month of lockdown with few exceptions to curb the spread of the coronavirus pandemic, which has hampered an already-slowing economy and forced many businesses to trim their operations leading to thousands of job losses.
Here are 10 things to know about the GDP data released today:
The median forecast from a poll of economists by news agency Reuters had pegged GDP growth at 2.1 per cent in the final quarter of fiscal year 2019-20, with forecasts ranging between +4.5 per cent and -1.5 per cent.
With data for the latest quarter, GDP growth for the full financial year – which ended on March 31 – came in at 4.2 per cent, as the COVID-19 lockdown affected the manufacturing and services sectors. In fiscal year 2018-19, the country’s GDP had expanded 6.1 per cent.
The GDP growth rate for the quarter ended December 31, 2019 was revised downward to 4.1 per cent from 4.7 per cent estimated in February. The GDP expanded 4.4 in the September quarter and 5.2 per cent in the June quarter of 2019-20.
In an official release, the National Statistical Office (NSO) said the GDP data flow from the economic entities was impacted due to the coronavirus-induced lockdown.
“Some of these units are yet to resume operations and owing to the fact that the statutory time-lines for submitting the requisite financial returns have been extended by the government, these estimates are based on the available data,” the statistics office said.
Earlier this month, Finance Minister Nirmala Sitharaman detailed monetary and fiscal stimulus worth Rs 21 lakh crore to shield the country from the economic fallout from the coronavirus outbreak.
Many economists have already lowered their projections for the current financial year, with some even warning about the possibility of a recession due to the COVID-19 disease-induced lockdown.
Some say the April-June numbers will give a clearer picture of the damage caused by the coronavirus to the economy.
With services taking a knock, US-based Goldman Sachs Group sees India’s economy contracting a record 5 per cent in 2020-21.
The services sector accounts for 55 per cent of the country’s GDP, and a slump in output triggers ripple effects on jobs and economic growth.
